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The automotive industry is undergoing tremendous transformation and change and there are various challenges that need to be addressed within South Africa’s automotive industry, African Innovators director Sherrie Donaldson said at the Manufacturing Indaba, in Sandton, on Wednesday.

Speaking as part of a panel addressing the impact of the Fourth Industrial Revolution on the automotive sector, she noted that the industry faced many global challenges and that South Africa needed to find a unique, local way to deal with those challenges, especially around transformation, supply chain management and unemployment.

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“A major challenge the industry is facing is competitors . . . and Industry 4.0 disruptors, such as Google [and its driverless car technology], which has become a major competitor, which was unheard of ten years ago,” she said.

Donaldson added that customer demand, speed-to-market and customisation in downstream areas were also major challenges facing the sector.

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“Manufacturers have to respond to these changes and they must react much faster when it comes to speed-to-market. They have to [expedite] their design and production techniques, fusing the combination of technology and people,” she said.

That, she noted, combined with ageing work forces, skills shortages, unskilled labour and education challenges, combine to create a unique dynamic in South Africa that needs to be properly dealt with.

Also speaking as part of the panel, National Association of Automotive Component and Allied Manufacturers operations director Dylan Jessup noted that Industry 4.0 was an important part of how the automotive sector was engaging and moving forward to maintain global competitiveness.

“We need to look at the business case around Industry 4.0,” he said.

He pointed out that the industry needed to look beyond the Automotive Production and Development Programme (APDP) and needed to engage more and collaborate with other stakeholders within South Africa’s automotive sector.

The APDP aims to add to the benefits offered to the industry under the terms of its predecessor, the Motor Industry Development Programme.

The replacement scheme is seen as potentially more effective as it will not only benefit new-vehicle production, but will also extend and diversify the country’s vehicle components supply chain.

“Regarding the APDP, a key factor in South Africa is increased localisation. That means there will be a deepening in supply chains which could create additional employment opportunities, which is vitally important,” Jessup said.

He added that unemployment was a huge challenge for the country and that the sector needed to present a business case that would attract investors to increase localisation in the sector.

“This can only be done if we embrace technology. It will give us a competitive edge. [Embracing] Industry 4.0 going forward is of vital importance,” he noted.

He further pointed out that the Australia automotive sector had built its business case on government assistance. When that support was removed, within 18 months, the entire industry has fallen apart and ceased to exist.

“We cannot suffer that same fate, we need to build our business case from government through the APDP, but we also need to embrace technology so that we can become and remain globally competitive,” he stated.

Manufacturing Circle executive director Philippa Rodseth, meanwhile, commented that there should be a collaborative approach between government and the automotive industry, stating that incentives and support from government to industry is an important requirement for the industry.